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International Law at Work - Hungary - August 2017

In 2016, after several years of extensive deliberation, the Hungarian Parliament adopted Act CXXX on Civil Procedure (the “New Civil Procedure”). The New Civil Procedure will come into force on 1 January 2018, replacing the old statute which formed the basis of the country’s framework for civil litigation for over 60 years. The new legislation includes some major changes that employers should bear in mind.

The most significant change may be the introduction of a “class action” – litigation, which can be brought in relation to employment, consumer and certain environmental claims. The New Civil Procedure requires at least ten claimants for the initiation of such a claim (represented by a single “representative plaintiff”), and all ten must be seeking to enforce a claim arising from the same rights and facts. As the legislature chose to establish an opt-in version of class actions in the New Civil Procedure, the scope of any judgment brought by the court in the class action only extends to those claimants who decide to be part of the class action early on. The opt-in structure thereby does not preclude claimants from seeking redress on the same legal and factual basis, even if they were not part of the initial class action, nor is the possibility of several, concurrent class actions on the same basis excluded. It is hard to predict whether class actions will become popular with employees; however, it seems certain that large employers with multiple employees will be somewhat more exposed to united actions by a greater number of employees than they used to be.

Further minor changes are also included in the New Civil Procedure. Currently, the courts in the geographical area in which the employer is based have exclusive jurisdiction over employment law disputes. This benefits employers by ensuring that actions can only be brought against them in courts closely connected to their activities. However, from 2018, employees will be entitled to bring a claim in a court located near the employee’s address or place where the employee worked for an extensive period of time. This will provide employees with more freedom in choosing the forum in which they wish to enforce their claims against their employers.

The burden of proof also shifts slightly towards the employer under the new legislation. After the New Civil Procedure comes into force, the employer will bear the burden of proof in relying on the content of any collective agreement, internal regulation, instruction, document created in the course of employment as well as the accuracy of any wage, benefit, or other allowance paid. Employers will be required to bear the burden of proof in respect of the above even if the result could benefit the employee.

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